Year ended 30 September 2017 C Dis isclaim imer For the purposes - - PowerPoint PPT Presentation

year ended 30 september 2017
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Year ended 30 September 2017 C Dis isclaim imer For the purposes - - PowerPoint PPT Presentation

Full year results presentation Year ended 30 September 2017 C Dis isclaim imer For the purposes of this notice, "presentation" means this document, its contents or any part of it, any oral presentation, any question or answer session


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C

Full year results presentation Year ended 30 September 2017

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Dis isclaim imer

For the purposes of this notice, "presentation" means this document, its contents or any part of it, any oral presentation, any question or answer session and any written or oral material discussed or distributed during the presentation. This presentation does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities in the Company, nor shall any part of it nor the fact of its distribution form part of or be relied on in connection with any contract or investment decision relating thereto, nor does it constitute a recommendation regarding the securities of the Company. The information and opinions contained in this presentation are provided as at the date of this presentation and are subject to change without notice. In furnishing this presentation, the Company does not undertake or agree to any obligation to provide you with access to any additional information or to update this presentation or to correct any inaccuracies in, or omissions from, this presentation that may become apparent. You should make your own independent evaluation of the Company and should make such other investigations as you deem necessary. No representation or warranty, express or implied, is given by or on behalf of the Company its directors, officers or employees or any other person as to the accuracy

  • r completeness of the information or opinions contained in this presentation and no liability whatsoever is accepted by the Company or any of its members, directors,
  • fficers or employees nor any other person for any loss howsoever arising, directly or indirectly, from any use of such information or opinions or otherwise arising in

connection therewith. Certain statements, beliefs and opinions in this presentation are "forward-looking statements". These statements reflect the Company's, or as appropriate, the Company's directors' current expectations and projections about future events. Such forward-looking statements involve risks, uncertainties and other important factors beyond the Group’s control that could cause the actual results, performance or achievements of the Group to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Group’s present and future business strategies and the environment in which the Group will operate in the future. Forward-looking statements contained in this presentation regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. These forward- looking statements speak only as of their date and the Group and its directors, officers, employees, agents, affiliates and advisers expressly disclaims any obligation or undertaking to supplement, amend, update or revise any of the forward-looking statements contained in this presentation to reflect any change in the Group’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based, except where it would be required to do so under applicable law. As a result of these factors, you are cautioned not to place undue reliance on such forward-looking statements.

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Hig ighli lights

  • 35% increase in global pets on plan to 188,000 (2016: 139,000)
  • 36% increase in Group continuing revenues to £2.53m (2016: £1.87m)
  • 50% increase in contracted clinics now totalling 1,084 in UK, Europe and US
  • 29% increase in the number of pets on plan in the UK to 156,000 (2016: 121,000)
  • £5.9m net cash proceeds after transaction costs from sale of the Premier Buying Group
  • £3.2m of cash at 30 September 2017 (2016: net cash of £0.4m)
  • US challenges being addressed

Post Balance sheet highlight

  • £1.5m committed funding facility agreed - provides security of funding and flexibility to consider alternative sources of

funding.

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  • Sticky and diverse customer base
  • Recurring revenue stream with compound growth
  • Bespoke scalable IT platform underpinning international operations
  • No bad debt exposure
  • Growth opportunity underpinned by cooperation agreements (Mid- West, Zoetis, MVS, VPI, PSI, TVC, MSD France)

Busin iness Fundamentals ls

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Premie ier Pet Care Pla lan

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What are Preventative Healt lth Pla lans?

Revenue streams come from:

  • transaction fee per pet per month (Direct Debit,

SEPA, Credit card), plus

  • set up fee per new pet plus
  • practice set up fee plus
  • manufacturer support fees
  • Our service includes:
  • Plan pricing
  • Plan design
  • Training and process integration
  • Marketing
  • Ongoing support and training
  • Global IT platform and transaction processing

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Benefits of the Pla lan

All parties stand to benefit:

  • Veterinary Clinics
  • Distribution
  • Pet Owners
  • Manufacturers

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Strategy

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Glo lobal IT IT Pla latform

  • Continued investment in Global IT

platform - £196k capex in FY 2017

  • FY 2017 achievements:
  • Rollout of portal throughout UK

and Europe improving customer experience

  • Additional functionality to

support US

  • Ongoing investment
  • Ongoing improvements in

resilience and security

  • Enhanced collection methods
  • Client reporting

Global PCP Web Portal

GoToBilling Credit Card Gateway WorldPay

Payment Processing Systems

Customer interface & Data capture BACS Active Finastra BACS Clearing SEPA Clearing NETS Clearing Citizen Bank

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UK UK

Total small animal clinics in UK – c4,800

Source: independent market research, company investor presentations

  • UK market continues to present opportunities

for growth

  • 29% annual increase in pets on plan to

156,000 at September 2017

  • 18% growth in clinics operating PPCP
  • PPCP serves both independent and corporate

customers

IVC 9% CVS 9% Linnaeus 1% Vets4Pets 9% Vetpartners 4% Medivet 3% Independent PVA Pet Care Plan Clinics 8% PPCP - Market Opportunity 57%

UK Market Share/Opportunity

Current PVA PPCP

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Europe - Netherla lands

  • 190 contracted clinics at 30 September 2017
  • Represents approximately 19% market

share

  • 46% annual growth in pets on plan to 24,000

at September 2017

  • Acquired customer base of competitor in

Netherlands

  • Customer base being transitioned over

coming months

  • Expected to become profitable during

FY2018

19% 81%

Netherlands Market Share/Opportunity PVA Pet Care Plan Market Opportunity

Rayons

aantal EGG's North (46) Middle (37) South (46)

Estimated small animal clinics – c1,000

Source: KNMvD: Koninklijke Nederlandse Maatschappijvoor Diergeneeskunde (Royal Veterinary Association of the Netherlands)

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Europe - France

  • 50 clinics signed up to PPCP during this

year (see map)

  • 33 clinics launched at 30 September 2017
  • Over 1,000 pets on plan
  • Initial sign up rates are encouraging
  • Cooperation agreement with MSD Animal

Health producing leads

  • Cooperation agreement with Clubvet, one
  • f France’s largest buying groups
  • Territory showing early promise

17% 82% 1%

France Market Opportunity Pet Care Plan primary targets Remaining market opportunity Contracted clinics

Estimated small animal clinics – c6,000

Source: l’Ordre national des veterinaires” ( National Register of Veterinarians)

Location of contracted clinics

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USA

Total small animal clinics – c26,500 (UK c4,800)

  • Registered in 22 states (highlighted)
  • Business focussed in South-Eastern and Mid-West States
  • Recent cooperation agreements signed with:
  • Purchases Services Holdings (“PSI”) – Group purchasing
  • rganisation with over 4,000 members
  • The Veterinary Cooperative (“TVC”) – Group purchasing
  • rganisation with over 3,000 members
  • 198 clinics signed contracts to launch PPCP at 30 September 2017
  • 92 clinics launched at 30 September 2017
  • 4,000 pets on plan
  • US challenges being addressed. Focussed on:
  • Improving sign up rates
  • Reducing cancellations
  • Increasing average clinic size
  • Leveraging partnership agreements

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Key y Performance In Indicators

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Glo lobal quarterly colle llection statistic ics

  • 553,000 transactions in Q3 2017

(equivalent to 2.2m annual transactions) – 38% increase on same quarter last year

  • Customer spend of £8.25m in Q3

2017 (equivalent to £33.0m annualised spend)

  • Generates sticky revenues for PVG
  • 35% increase in pets on plan in last

twelve months

  • 188,000 fee generating pets in

September 2017 with growth in all regions

000's Sep - 16 Dec - 16 Mar - 17 Jun - 17 Sep - 17 UK 121 132 137 145 156 Europe 18 21 22 25 28 US

  • 1

2 3 4 Total 139 154 161 173 188

# fee generating pets on plan

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Glo lobal clin linic ic rela lationships

  • In total PVG now has 1,084 clinics

contracted to PPCP

  • Important influence when

negotiating with pharmaceutical manufacturers and wholesalers/distributors

440 432 438 1000 750 575 198 311 200 400 600 800 1000 1200

P VG I VC ( UK ) C VS ( UK ) P ETS AT HO ME ( UK ) BANF I ELD ( US ) VC A ( US )

  • NO. OF CLINICS

Global Clinic Relationships at 30 September 2017

UK USA EU

1,084

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Div iverse Customer Base

  • Total of 455 contracts with

practices throughout UK, EU & US.

  • Only Medivet, the group’s

largest customer practice has

  • ver 10,000 pets on plan.
  • 95% of practices have less

than 1,000 pets on plan.

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Fin inancia ials

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Profit and Loss - revenues

Year ended 30 September 2017 Revenues £000s 2017 2016 % change PPCP – UK 1,873 1,606 17% PPCP – Europe 493 263 87% PPCP – US 168

  • N/A

Total - continuing operations 2,534 1,869 36%

  • 36% increase in global revenues
  • 17% UK revenue growth in line with plans.
  • Ongoing opportunities for revenue growth from

existing customers and new opportunities

  • 87% European revenue growth
  • Netherlands the key source of growth in FY 2017
  • France in early stage of development
  • US revenue growth behind expectations due to

reductions in the rate of pet sign ups and higher cancellation rates than expected

  • US remains the largest single opportunity for

additional growth

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Profit and Loss – profit its and EBIT ITDA

  • Significant people and operating cost investment in both

Europe and US resulting in an increased operating loss

  • Operating expense investment in IT development and

finance team in UK to support expansion and development requirements

  • No executive bonus reducing central unallocated costs
  • One-off items incurred mobilising US investment and on

legal costs to acquire customer base in Netherlands

  • Finance expense reduced following repayment of debt

after veterinary practices business disposal

  • Profit on discontinued operation in 2017 represents

trading profit of Buying Group up to date of disposal and gain on disposal

Year ended 30 September2017 Profits £000s 2017 2016 % change PPCP – UK 622 442 41% PPCP - Europe (983) (809) (21)% PPCP – US (1,895) (635) (198)% EBITDA from PPCP (2,256) (1,002) Central unallocated costs (1,546) (1,908) EBITDA from continuing operations (3,802) (2,910) One-off items (172)

  • Depreciation and amortisation

(134) (77) Operating profit (4,108) (2,987) Finance expense (161) (208) Loss before and after tax from continuing operations (4,269) (3,195) Profit on discontinued operations 5,890 5,019 Profit attributable to equity holders 1,621 1,824

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Bala lance sheet

  • Trade and other receivables reduced following receipt of

escrow money from sales of veterinary practices business

  • Sale of Buying Group enhanced net asset position
  • Part of Buying Group proceeds used to repay loan notes
  • Deferred tax liability increase due to rollover relief being

claimed on Buying Group disposal

As at 30 September £000s 2017 2016 Non-current assets 495 446 Trade and other receivables 705 1,719 Trade and other payables (977) (871) Net working capital (272) 848 Cash 3,218 1,254 Debt

  • (900)

Net cash/(debt) 3,218 354 Deferred tax (134) (10) Net assets 3,307 1,638

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Cash flo low

  • Significant investment in international expansion

impacting EBITDA

  • Ongoing capital investment in IT around £250k per

annum

  • Net disposal proceeds in 2016 relate to veterinary

practices business

  • Net disposal proceeds in 2017 include £1m escrow

release from disposal of veterinary practices and balance relating to sale of Buying Group

  • Post balance entered into a committed facility with

Bybrook Finance Solutions Limited (“BFSL”) for up to £1.5m in unsecured loan notes for drawdown in three equal tranches from 1 June 2018 to 31 May 2019.

  • Arrangement provides security of funding whilst

being sufficiently flexible to continue to consider alternative sources of funding.

Year ended 30 September 2017 £000s 2017 2016 £'000 £'000 EBITDA after central costs and non-recurring items (3,802) (2,910) Non-recurring items (172) Net working capital movement (74) (136) Investment in IT and equipment (276) (210) Interest on loans and finance leases (161) (208) Free cash flow (4,485) (3,464) Net disposal proceeds 6,963 5,047 Discontinued activities 338 881 Issue of share capital 48 97 Movement in net cash/(debt) 2,864 2,561 Opening net debt 354 (2,207) Closing net cash/(debt) 3,218 354 Net debt made up of; Cash 3,218 1,254 Debt

  • (900)

3,218 354

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  • Sticky and diverse customer base
  • Recurring revenue stream with compound growth
  • Bespoke scalable IT platform underpinning international operations
  • No bad debt exposure
  • Growth opportunity underpinned by cooperation agreements (Mid- West, Zoetis, MVS, VPI, PSI, TVC, MSD France)

Busin iness Fundamentals ls

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Appendix

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Market opportunit itie ies

Market data UK Neth Germany France USA Population 64m 17m 81m 66m 319m Households 26m 7.4m 41m 26m 123m Dog population 8.5m 1.6m 5.3m 7.4m 70m Dog ownership households 24% 19% 13% 21% 36% Cat population 8.5m 2.6m 8.2m 11.4m 74m Cat owner households 19% 26% 16% 27% 30%

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Thank you for your tim ime

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